A new Economic Policy Institute study released today finds that full-time state and local government employees in Pennsylvania are not overcompensated, when compared to otherwise similar private-sector workers. Pennsylvania public employees’ hourly compensation costs are a statistically insignificant 2.1 percent lower than that of private-sector employees.

The analysis, Public Versus Private Employee Costs in Pennsylvania: Comparing Apples to Apples, by Labor and Employment Relations Professor Jeffrey Keefe of Rutgers University controls for education, experience, organizational size, gender, race, ethnicity, citizenship and disability. The study uses data collected primarily from a comprehensive database that is updated monthly by the U.S. Census Bureau and Bureau of Labor Statistics, and in accordance with standard survey practice, focuses on year-round, full-time public and private-sector employees.

Major findings of the study include:

Pennsylvania public employees earn a statistically-insignificant 2.1% less in hourly compensation than similar private-sector workers. When compared on an annual basis, full-time state and local employees are undercompensated by a statistically-significant 5.4%.

Pennsylvania public-sector workers are more highly educated than private-sector workers; 53% of full-time Pennsylvania public-sector workers hold at least a four-year college degree, compared to 32% of full-time private-sector workers.

Pennsylvania state and local governments and school districts pay college-educated workers on average 21% less than do private employers.

Pennsylvania public employees—like most other American workers—have in fact been victims of the worst national recession since the Great Depression. In fact, severe financial problems as a result of the Great Recession have forced state, county and municipal elected officials in Pennsylvania and other states to make large cuts in spending. As a result, public sector employment has been slashed by 3,400 jobs in Pennsylvania in the last year, with thousands more workers at risk of job loss in the years ahead.

Keystone Research Center

The Pennsylvania Budget and Policy Center

KRC is the home of the Pennsylvania Budget and Policy Center (PBPC), a nonpartisan, statewide policy research project that provides independent, credible analysis on state tax, budget, and related policy matters, with attention to the impact of current or proposed policies on working families.

The Pennsylvania Fund for Workforce Solutions (PFWS)

KRC helped catalyze and provides staff support to PFWS, managed by the United Way of Pennsylvania. PFWS supports Industry Partnerships that are creating employment and advancement opportunities for lower-skilled adults. The PFWS is a collaborative of Pennsylvania's leading funders and a site of the National Fund for Workforce Solutions.